Should you buy bitcoin?

They serve no useful economic purpose, though in macroeconomic terms, cryptocurrencies probably also do little harm

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In December, as the bitcoin price neared $20,000, a friend asked me whether she should invest. I said that I hadn’t the faintest idea. Today, with the price below half that, my reply remains the same.

Over the next year, the bitcoin price could double, soar tenfold, or collapse by 95% or more, and no economic analysis can help predict where in that range it will lie. Its value is arbitrarily determined by the collective psychology of the mass of investors; it goes where, on average, they think it will. Like other cryptocurrencies,...